Principles of Microeconomics/ACDC Leadership Unit 2 review

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Demand
The different quantities of goods that consumers are willing and able to buy at different prices
Supply
The different quantities of a good that sellers are willing and able to produce at different prices
Equilibrium
Where supply and demand meet (market clearing price)
Shortage
Quantity demanded > quantity supplied
Surplus
Quantity supplied > quantity demanded
Price Controls
when the government gets involved and sets the price either high or low and prevents the market from being at equilibrium
Price Ceiling
When the government sets the price artificially low causing a shortage
Price Floor
When the government sets the price artificially high causing a surplus
Elasticity
Shows how sensitive quantity is to a change in price
Cross-Price Elasticity of Demand
how sensitive a product is to a change in price of another good
Income Elasticity of Demand
how sensitive a product is to a change in income
Price Elasticity of Supply
how sensitive quantity supplied is to a change in price
Consumer Surplus
the difference between what you are willing to pay for a product and what you actually pay
Producer Surplus
the difference between the price the seller received and how much they were willing to sell it for
Excise Tax
A tax on products that is either split between producers and consumers or covered completely by one or the other depending on the elasticity of demand
Tax Incidence
Whether the consumer or producer pays for the tax
Utility Maximization
chart of Marginal Utility (or additional satisfaction recieved) from a combination of different things
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